Statistics released recently by the Tribunal Service show that the total number of claims lodged with an Employment Tribunal in 2009-10 was 236,100 compared to 151,000 for 2008-09. This amounts to an increase in the number of claims made to an Employment Tribunal by over 56%. In this article Guy Hollebon, Head of Employment Law at Bristol and London based Bevans Solicitors, analyses the dramatic rise in claims and gives top tips to employers to minimize the risk of being taken to the Tribunal.
The rise in the number of claims made to an Employment Tribunal by over 56% can in part be explained by the global economic slump and the increase in staff being made redundant. A more careful analysis of the figures reveals that a partial explanation for such a large increase to the number of claims is that many are equal pay claims. It is not for this article to go into the intricacies of equal pay claims but a significant number have been issued by unions acting on behalf of their members. Finally, the increase in claims may be a sad indictment on the ever increasing compensation culture which is developing.
Whatever the underlying reasons for the increase the fact remains that all businesses face greater risks of Tribunal claims. Even if they are ultimately successfully defended there will inevitably be a cost to the business for lawyers fees, the management time spent dealing with the claim and the lost opportunities which flow from this and possible reputational damage to the business – Employment Tribunals are public hearings and members of the press often sit in.
There are however a number of easy ways to avoid claims, or at least to minimise the risks of claims. I will set out five key steps.
- Get your employment documentation in place. it is a legal requirement to give all employees a written statement of particulars of employment containing set information within two months of the employee’s start. A failure to comply can lead to compensation of two to four weeks pay being ordered in favour of an employee. A clear and well drafted contract with appropriate policies and procedures supporting the contract will go a long way to reduce disputes arising. If a matter is dealt with in the contract (which has been signed as accepted by the employee) there is little room for dispute. The employee may not like it but they have agreed to those terms. Disputes frequently arise where something has not been included within a contract or policy. For example the rate of holiday pay – is it based on total days in the year or just working days. An express clause in the contract will make the position crystal clear.
- Management should not duck issues. It usually pays in the long run to grasp the nettle. We frequently get instructed when a problem has been allowed to fester and has not been addressed at an early stage and the conflict between employer and employee has developed into a full blown, and costly, dispute. If you are concerned about an employee – whether it is related to their conduct, performance, absence or other – it is better to address the issue early on.
- Make sure that a fair procedure is followed. Having decided to grasp the nettle it is important that you do the right thing. Employment law is a mine field now and it does pay to get proper advice, either from an HR professional or a specialist employment lawyer. Tribunals see many claims where the employer is entitled to take action against a recalcitrant employee but it gets the procedure wrong and this then leads to a finding of unfair dismissal in favour of the employee. The process should not be hasty. It should be carefully planned and implemented.
- Deal with employee grievances. Complaints from employees should not be ignored or brushed under the carpet. A grievance, whether informal or formal, is an early warning that there is a problem which needs addressing. It therefore presents an opportunity to resolve the issue before it develops into a full blown dispute.
- Sometimes you can’t avoid a claim. After all it is free to lodge a claim with the Tribunal and therefore a disgruntled employee may think they have nothing to lose by lodging a claim. Provided that the employer has followed a fair procedure and has generally treated the employee fairly and reasonably then there should be a good arguable defence to the claim. Moreover, Tribunals are increasingly trying to identify weak claims at an early stage and where appropriate will make a costs order where claims were misconceived and had no reasonable prospects of success but were continued. A good employment lawyer will be able to put the best arguments across on the question of costs.